![IRS Alerts Individual Taxpayers About Abusive ESOP Schemes [Photo: National Association of Plan Advisors]](https://omdnews.com/wp-content/uploads/2023/08/National-Association-of-Plan-Advisors.jpg)
The IRS warns businesses and tax professionals to be alert to a range of compliance issues related to ESOP. The IRS is focusing on this transaction to ensure high-income filers pay the taxes they owe.
![IRS Warns Businesses and Tax Professionals About ESOP Compliance Issues [Photo: NJBIA]](https://omdnewsnew.s3-accelerate.amazonaws.com/2023/08/NJBIA.jpeg)
IRS Warns Businesses and Tax Professionals About ESOP Compliance Issues [Photo: NJBIA]
IRS Alerts!
The IRS warns businesses and tax professionals to be alert about ESOP compliance issues- The Internal Revenue Service focused on this transaction to ensure the tax laws are applied fairly and high-income filers will pay their tax obligations. Due to aggressive tax claims businesses and individual taxpayers needs advice from independent and trusted tax professionals to avoid big trouble.
The IRS warns businesses and tax professionals to be alert about ESOP compliance issues- the Internal Revenue Service noted they focused on high-income filers to pay their tax obligations because some high-income taxpayers may hide their income and evade paying their share. The IRS is now taking action to close this gap.
What is ESOP? According to the source, Employee Stock Ownership are retirement plans that allow employees to own stock in their employer’s company. Internal Revenue Service has seen promoted arrangements using ESOP that are potentially abusive because a business creates management whose stock is wholly owned by an ESOP for the sole purpose of diverting taxable business to the ESOP to avoid taxation of that income. These transactions impact ESOP and will possibly lose their management. The IRS will continue to use a range of compliance tools over the next year.
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